Thursday, October 27, 2016

An email from a national title company based in Florida arrived the other day asking if we would record a Rescission of Discharge of Mortgage or a Rescission of Assignment of Mortgage.

I don't think we would or should record them. To me, rescission is part of contract law, as in you rescind a contract or an agreement. I don't see it as part of real estate law. Both a discharge of mortgage and an assignment of mortgage are conveyances of an interest in real estate. Under Massachusetts law, a mortgage is a deed because the homeowner conveys an interest in the real estate to the lender. That interest is the right to foreclose if the terms of the associated promissory note are violated. An assignment of mortgage transfers that interest in real estate from the lender to a third party. With a discharge of mortgage, the holder of the mortgage releases or gives back its interest in the property to the homeowner.

Once that interest in the mortgage has been assigned or released, I don't think the mortgagee can say "never mind" and undo that conveyance with a document labeled "rescission." If a mistake was made, I think the mortgagee would have to get either an assignment back or re-execute and confirm the mortgage. Either that or initiate a lawsuit and ask a judge to order either of those things to happen.

The concern isn't just to the homeowner. It's to the entire real estate system. If a potential buyer of property does a title exam and sees that a mortgage has been discharged, that potential buyer should be able to act upon that information without fear that the lender on that mortgage will suddenly yank back the discharge and thereby reinstate the mortgage.

I assume these rescission documents are used in other states. I'm curious to find out how they are used and the legal theory that allows their use. It is another example of how much real estate law can vary from state to state and a cautionary message to anyone handling real estate matters in more than one state to not assume that the law in one jurisdiction carries over to another.

Tuesday, October 25, 2016

Yesterday was the first day of early voting in Massachusetts. Not just the first day this year, but the first day ever, as I understand it. In Lowell, you can vote at the Election Office in City Hall, Monday through Friday this week and next, during normal City Hall hours of operation. Each night this week and next, and on the intervening Saturday and Sunday, the Lowell Election Office will also take to the field, partnering with a different community organization each day to provide an early voting site.

After work yesterday, I went to Temple Emanuel on West Forrest Street to vote. It happens to be in my neighborhood, but any city voter can vote at any one of these early voting sites. The process worked well: upon entering the room, I gave my name to a poll worker who entered it into a tablet device. That pulled up my voter record. I was asked to look at the record and click on a button that acknowledged I was there person shown in the record. That caused an attached label printer to produce a sticky label with my name, ward and precinct printed upon it. The label was affixed to an envelope which I was given along with my ballot. There were several portable but private voting booths available for filling out your ballot. Once that was done, you inserted the ballot into your envelope, sealed the envelope, and handed it to a poll worker who then gave you an "I voted" sticker. That was it. At the end of the evening, all of those sealed envelopes were taken to city hall and locked in the election office's safe. On election day, they will be distributed to the appropriate precinct and will be counted in the same way that absentee ballots are tallied.

Early voting was well-organized. It was also an interesting experience. The knowledge that you've already voted two weeks before election day is both comforting and, because it's a change from the norm, a little discomforting. I do think it's a great idea and hope that it is extended to all elections.

Thursday, October 20, 2016

The Middlesex North Registry of Deeds created its last paper record book back in 2001. Today, we have more books that only exist virtually than we do books that exist in tangible form. Digitizing our records has made them much more accessible to our users while also reducing our costs. In recent years, however, increasingly sophisticated hacking attempts have become a substantial threat to digital records.

This past meeting, the Massachusetts Registers of Deeds Association convened a meeting about the threat that hacking poses to our records and our operations. In one presentation, a representative from the Hub Technical Services provided details about the threat environment. For example, five years ago, the preferred tactic of the bad guys was data exfiltration which means they penetrated your computer defenses, grabbed some of your data, and transported it electronically to a device on their control. That was complicated and resource intensive.

Today, the preferred tactic is to encrypt on-site. There, the bad guys insert an encryption program onto your computer and execute it. This encrypts all of your files which means you cannot open them even though they are still on your computer. The only way to get access to your data is to pay the ransom, obtain the decryption key from the bad guys, and use it to decrypt your files. Of course, that assumes they give you the key even after you pay the ransom.

So how does this malicious encryption program get on your computer? Usually it comes via email. Bad guys will disguise an email to look like something coming from someone you know, or at least to resemble something of interest to you. We live in a "click happy" culture, so the recipient of the will often open it and click a link in it. That launches the encryption program.

The Hub Tech representative said one in ten of these infiltration efforts is successful and that there are 316 new malware threats made every minute.

How to protect against these attacks? It's difficult. User education is very important (Don't click on unknown emails!). So is keeping security software up to date. But it's almost inevitable that an attack will succeed, so having good backups that can be quickly restored are key to preparedness.

Tuesday, October 18, 2016

Besides voting for president, members of congress, members
of the state legislature, and some other state and county offices,
Massachusetts residents will answer four statewide referendum questions on the
November 8, 2016 ballot.

Question 1 will allow the Gaming Commission to issue another
slots license;

Question 2 will authorize the creation of up to 12 new
charter schools each year;

Voters in Boston will have a fifth question: whether the
city should adopt the Community Preservation Act. The CPA requires voters to
assent to a property tax surcharge to be used for affordable housing, open
space protection, and historic preservation. The amount raised would be
increased with money from a state matching fund that consists of money raised
through a surcharge on documents recorded at the registry of deeds. The Boston proposal
would raise $16mil from property taxes. That amount would be increased by $4mil
from the CPA fund for a total of $20mil.

Mayor Walsh and other leaders in Boston have endorsed the
proposal. The Boston Globe did that today in an editorial.

The Community Preservation Act was born in 2003. More than
150 communities in Massachusetts have taken advantage of it. Some like Lowell
have never even tried, presumably because few leaders are willing to ask people
to voluntarily raise their taxes. Still, people who live in communities that
don’t use the CPA are subsidizing everyone who does, because everyone
contributes to the fund. Since 2008, the Middlesex North Registry of Deeds has collected
nearly $10mil in CPA surcharges which are $20 per document in most cases.
Perhaps if Boston voters endorse Question 5, other communities in Massachusetts
will be inspired to do give the CPA a shot.

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